Blockchain is a type of distributed ledger that can record transactions in a public or private peer-to-peer network. But that’s not the innovative part. It takes things to the next level by how it works. With blockchain:
- Transactions are usually distributed across all members in the network. They’re called nodes.
- Instead of one version, it tracks transactions in a chain of encrypted records called blocks.
- All blocks are validated by the network. Then they are linked from the beginning to the most current—hence the name blockchain.
The blockchain acts as a single source of truth, as altering any existing transaction will break the chain.